Oakland has been rushing for months to be the first city in California to license and tax large-scale commercial pot farms, but could a cryptic warning message from the city attorney put the brakes on the whole thing?

Probably not. But a memo sent by City Attorney John Russo to council members last month will be a hot topic when the City Council meets in closed session Dec. 21. Spokesman Alex Katz said his boss would only say that law enforcement officials in Washington, D.C., and locally “have expressed concerns with the path Oakland is taking, which is in violation of law.”

Russo also refused to sign the commercial cultivation ordinance, even though his department helped draft the document.

Councilmember Rebecca Kaplan, who with Councilmember Larry Reid authored the ordinance, said Thursday that she was intrigued by the cryptic message and is looking forward to finding out what it’s all about.

“The only thing we’ve received is (word that) some unnamed federal official has some unnamed concerns,” Kaplan said. “It feels like dancing in the dark. I would be happy to respond to their concerns if I knew what they are.”

Kaplan said she wouldn’t mind tweaking the ordinance to address concerns, but it would not “be helpful” if it turns out the warning was issued by someone who is politically opposed to the idea of medical marijuana.

“If there are tweaks we should make to the regulations, we should know what they are, and then we can debate whether we want to make them,” she said. “I have no problems with ideas for making (the ordinance) stronger.”

The council voted in July to license and regulate four large-scale commercial pot farms to produce medical marijuana for Oakland’s dispensaries, which will soon grow from four to eight. The goal is to move the illegal and often dangerous cultivation out of private garages, basements and attics, and into the open where it can be regulated, said Ada Chan, Kaplan’s legislative analyst.

More than 100 people interested in applying for one of the coveted permits attended an informational meeting at City Hall on Nov. 22. The deadline for returning the completed applications is Dec. 22, said Nancy Marcus, administrative assistant in the special business permits office.

There have been no requests to suspend the application process until the council has a chance to discuss and evaluate the city attorney’s concerns, Marcus said. The applications will be screened and ranked based on a point system that evaluates security, fire safety, environmental controls and local hiring, to name a few areas. Ten finalists will be notified Jan. 10 and invited to take an exam to demonstrate their knowledge of state and local law governing medical marijuana. The field of applicants will be whittled down to four based on the results of the exam, and the city’s hearing officer will then preside over a public hearing before any permits are issued to give people a chance to raise concerns about any of the finalists. Those who testify will be required to do so under oath, Marcus said.

The schedule could change, depending on the volume of applications the city receives, Marcus said, but the goal is to issue the permits between Feb. 22-24.

Many of the applicants have been meeting with and lobbying elected officials for several months, hoping to get a foothold that will vault them to a preferred list of applicants. But Kaplan said she and other council members have not been involved in the application process since the council voted to approve the ordinance and timeline.

Mayor-elect Jean Quan said the warning issued by the city attorney was similar to warnings he made when the city decided to permit and regulate its dispensaries six years ago. Since then, other cities have looked to Oakland and used its ordinance as a model for regulating their own medical dispensary businesses, Quan said.

She agreed the city was charting new territory with the cultivation licenses, but she said it is the best way to make sure the patients are getting a reliable, safe product, as well as reduce the risk of crime and fire caused by growers setting up shop in residential neighborhoods. The new regulations include oversight to make sure there is a closed loop system and the herb produced by the four cultivation businesses can only be supplied to bona fide medical marijuana dispensaries, she said.

“We know this is a gray area,” Quan said. “We may be wrong. The feds may come and yell at us. But because we have the dispensaries, there is an impetus for us to try and get a safe source of product for them too.

“It’s part of the natural growth (of the industry),” she added. “If we accept these dispensaries, we have to take the next step and regulate the cultivation and make sure the product is safe and organic.”

Although Attorney General Eric Holder warned this fall that California would be on the radar of federal law enforcement if voters passed Proposition 19 to legalize marijuana for recreational use, neither his office nor any other has made any on-the-record comment about efforts by Oakland, Berkeley or other cities that have voted recently to license and tax commercial marijuana cultivation businesses.

Russo refused to divulge the names of the agencies or federal agents who prompted his memo.

Kaplan said she’s open to constructive suggestions, but she said federal officials shouldn’t lose site of the bigger picture.

“There are criminal cartels digging tunnels under the border, but we’re going to bust sick patients in Oakland? The permits are about having more control and oversight and preventing the criminal element,” she said.

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